FAMILY PROPERTY

1. PRESUMPTION OF RESULTING TRUSTS

 Resulting trusts are implied where a person transfers property

or money to another in circumstances where it’s unclear who
owns the equitable interest.

 The transferee holds the property or money on a resulting

trust for the transferor.

 The equitable interest jumps back to (or sometimes never

leaves) the settlor.

》 Westdeutsche Landesbank v Islington London

Borough Council

o A resulting trust was said two arise in TWO SETS

OF CIRCUMSTANCES:

i. VOLUNTARY TRANSFER OF PURCHASE

MONEY  there’s a presumption of
resulting trust from Y to X mathematically
equivalent to the percentage of contribution
to purchase price if:

〜 X transfers purchase money to seller;

and

〜 Property is put in Y’s name (or in the

names of X and Y together); and

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 〜 Payment is made at the time of the
acquisition of the property.

》 Curley v Parkes

o RATIO: the court here

considered what type of
payments gave rise to the
presumption of resulting
trust. It held the
payment must be part
of the purchase price
(not say, legal fees and
stamp duty) and it
must be made at the
time of the initial
purchase. (Payment of
the whole or part of the
deposit or any other
contribution to the
purchase price at the time
of the purchase will
qualify). Payments of
mortgage instalments
and other outgoings
after the date of the
purchase will not give
rise to a resulting trust.

o NOTE: this case makes it

clear that a resulting trust
is only possible if the

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 claimant has contributed
to the initial purchase
price of the property, and
so it will not help a
claimant who has
contributed to later
mortgage payments.

〜 NOTE: voluntary transfer of purchase

money also applies to lottery
syndicates.

》 Abrahams v Trustee in
Bankruptcy of Abrahams

o FACTS: Mr and Mrs

Abrahams joined a lottery
syndicate (that is to say, a
group of people who
participate in the lottery
together); all fifteen
members paid £1 a week
each; a while later Mrs
Abrahams left her
husband but continued to
pay her own £1 and £1 on
behalf of her husband,
which she later recovered
from him; however, after

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 an argument, he refused
to reimburse her anymore;
Mrs Abrahams intention
was that if she won a
prize, she would be
entitled to two shares in
the prize instead; Mr
Abrahams was later
declared bankrupt; the
syndicate won £ 3 million;
Mrs Abrahams claimed 2 /
15 of the prize money,
however this was argued
against by the trustee in
bankruptcy of Mr
Abrahams who tried to
claim 1 / 15.

o HELD: in accordance with

the presumption of a
resulting trust, the ticket
purchased by Mrs
Abrahams in her
husband’s name was held
on presumed resulting
trust for Mrs Abrahams
who was accordingly
entitled to 2 / 15 of the
prize money.

〜 NOTE: voluntary transfer of purchase

money also applies to chattels.

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 》 Parrott v Parkin

o FACTS: X and Y purchased

a yacht, which was
registered in X’s name
even though Y had paid
55% of purchase price.

o HELD: X was holding yacht

on trust for Y, there was
no evidence of gift either.

〜 EXAM TIP: recent cases have applied

constructive rather than resulting
trusts to determine the shares of
cohabitees in a home, so go on to
consider constructive trusts where the
people concerned are cohabitees
(Stack v Dowden), though
remember  resulting trusts will still
be useful where the property is bought
as an investment instead of a home
for themselves.

》 Laskar v Laskar

o FACTS: a mother and

daughter contributed to
the purchase of a house
which later was let to
tenants.

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 o HELD: the court decided
the Stack v Dowden
principles were not
applicable to the
acquisition of investment
properties, i.e. properties
bought for rental income
and capital appreciation
(an increase in the price or
value of assets). Here the
equitable interest would
reflect their respective
contributions to the
purchase price by virtue of
a resulting trust analysis.

o RATIO: generally speaking

where members of a
family purchase a property
in their joint names there
would be a presumption of
equal interest, however
this would not apply where
the property was
purchased as an
investment rather than a
home for themselves.
Accordingly, the equitable
interest would reflect their
respective contributions to
the purchase price.
o Neuberger L.J: “although
the parties were mother

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 and daughter [...] they
had independent lives
[...] the purchase of the
property was not really for
the purpose of providing a
home for them”.

ii. VOLUNTARY TRANSFER OF PROPERTY 

there’s a presumption of a resulting trust
from Y to X if:

〜 X transfers property to Y;

〜 No consideration is supplied; and

〜 There’s no evidence of X’s intention.

》 Thavorn v Bank of Credit and

Commerce International

o FACTS: aunt (A) opened

bank account in name of
her nephew (N) who was
under 18. (A) gave
instructions to the bank
that she alone was to
operate the account.

o ISSUE: did the

presumption of a resulting
trust apply?

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 o HELD: presumption of
resulting trust applied
here because there was no
evidence of (A’s) intention
to benefit (N), which
actually would have
rebutted the presumption.

〜 NOTE: consistent with Section 60(3)

Law of Property Act 1925, the
presumption is less likely to apply if
the property in question concerns land
(there must be some additional factor
in which case, such as the parties
being strangers, which may point to a
resulting trust).

2. PRESUMPTION OF ADVANCEMENT

 In some situations, the starting point is not a presumption of

resulting trust but rather the presumption of advancement,
i.e. gift.

 The presumption of advancement applies where the person

making the voluntary transfer / providing the purchase money
is regarded as being under an obligation to provide for the
other party.

 Where the parties in question are related, the presumption of

a resulting trust may be overridden by a presumption of

advancement.

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  The presumption of advancement applies in THREE

SITUATIONS:

i. When a father makes a voluntary transfer of property /

voluntary transfer of purchase money in the name of his

child, the child may be an infant or an adult but must

have been born to parents who were married to each

other;

》 Bennet v Bennet

o FACTS: a mother wanted to help her son

who was in some financial difficulty.

Consequently, she gave her son £300 in the

way of a loan. The son still went bankrupt an

could not pay his debts. The trustee in

bankruptcy tried to claim what was left of

his money.

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 o HELD: the court stated there was no

presumption of advancement between a

mother and her child, as there was no moral

obligation for a mother to provide for her

child. This could only be a father or a male

figure.

ii. When a person in “loco parentis” makes a voluntary

transfer of property / voluntary transfer of purchase

money in the name of a child; a person is in “loco

parentis” if he has taken on a father’s responsibility to

provide financially for a child (NOTE: a widowed mother /

single parent might be regarded as in loco parentis,

which would give rise to the presumption of

advancement);

》 Bennet v Bennet

iii. When a husband makes a voluntary transfer of

property / voluntary transfer of purchase money, in the

name of his wife, and where a finance makes a

voluntary transfer of property / voluntary transfer of

purchase money, in the name of his finance.

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 》 Pettitt v Pettitt

o FACTS: a woman purchased a matrimonial

home for herself and her husband to live in

out of her own sums and conveyed the

home into her own name. They cohabited

the home together, during which the

husband made alterations and

improvements to the home. Following their

divorce, the ex-husband claimed he actually

had an equitable interest in the home as his

contributions to the property increased its

value.

o ISSUE: could a spouse claim an equitable

interest in a matrimonial home in which they

had no legal interest, by virtue of their

decorations and improvements to the home,

to entitle them in a share in the proceeds off

the sale of the property?

o HELD: improvements made to the home did

not entitle the ex-husband to an equitable

interest in the property; the voluntarily

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 undertaken improvements and decorations

of the family home served the purpose of

“making the home pleasanter for their

common use and enjoyment”; the

presumption of advancement applied here,

since it was the husband that spent money

on improving his wife’s property, and in the

absence of evidence to the contrary, this

must be regarded as a gift to the wife.

3. Can the presumptions be rebutted?

 The presumptions of resulting trust and advancement only

operate in the absence of admissible evidence of the apparent

donor’s intention.

 EXAM TIP: determine which presumption applies and then

consider whether there is evidence of intention that can rebut or

displace it.

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  The presumptions may be rebutted by the surrounding

circumstances at the time of the transaction:

a. Where an explanation is given;

》 McGrath v Wallis

o FACTS: a father and son provided some of

the purchase money to buy a house; the

house was conveyed into the son’s name

alone at the request of the mortgage

provider, who did not lend to people of the

father’s age; when the father died, the son

claimed the father’s contribution to the

purchase price was a gift to him by reason

of the presumption of advancement.

o HELD: the presumption of advancement was

rebutted. The decisive factors were: the fact

the son alone was acceptable as a

mortgagor of the property (the reason for

the house being put in the son’s sole name

was basically a technicality); and, the

intention of the father was said to be

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 reflected in a declaration of trust he had

drafted indicating he was to have an 80%

equitable interest and the son 20%.

o NOTE: when dealing with the presumption of

advancement and the level of evidence

required to rebut it, the court takes a light

touch in regard to this question as the

principles are clearly outdated. This case

demonstrated the more modern approach is

to accept a rebuttal of the presumption of

advancement in family cases on the basis of

comparatively slight evidence: such as here

where the declaration of trust had not even

been signed by the father and so was yet

not valid, but was deemed sufficient to rebut

the presumption of advancement.

》 Marshal v Crutwell

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 o FACTS: a husband transferred his bank

account into the joint names of himself and

his wife.

o HELD: the presumption of advancement was

rebutted by evidence the reason for doing

this was simply convenience, and not by

way of gift.

b. Proof of intention to make a gift / loan (e.g. if it was

one’s birthday / wedding it would be fairly easy to rebut

the presumption of resulting trust by evidence they

intended to give a gift);

》 Warren v Gurney

o FACTS: a further purchased a house in his

daughter’s name at the time of her wedding.

The obvious inference would be that it was

intended as a gift. However, the

presumption of advancement was rebutted

by the declarations of the father that a gift

was not intended and equally by the fact

that he indeed had retained the title deeds

to the property until his death.

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 》 Loosemore v McDonnell

o FACTS: a father-in-law supplied £100 k

towards the purchase of a matrimonial

home for his son and daughter-in-law. When

the marriage ended, the question was

whether the money was a loan or a gift,

either of which would rebut the presumption

of resulting trust.

o HELD: at the time of the purchase the

father-in-law confirmed he claimed no

interest in the money, and that he had no

wish to secure the money by a charge over

the house. This was clear evidence that a

gift, and not a loan was intended. If a loan is

intended, this should be evidenced.

3.1 When is the evidence admissible?

 Claimants attempting to rebut the relevant presumption may

produce in evidence only acts done and statements made at,

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 or before, the time of the transaction, not later self-justifying

statements or acts (Shepard v Cartwright).

4. CONSTRUCTIVE TRUSTS

 A constructive trust arises whenever the circumstances are

such that it would be unconscionable for the owner of the

property to assert his equitable interest in the property

(Paragon Finance).

 Constructive trusts are more appropriate to determine the

equitable interests of cohabitees in a property purchased as

their home (Stack v Dowden).

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 4.1 Is there a common intention constructive trust?

 To claim an equitable interest under a constructive trust X

would have to bring herself / himself within one of the

categories referred to in the case of Lloyds Bank v Rosset:

a. Express common intention and detriment; or

b. Inferred common intention and detriment.

i. EXPRESS common intention;

 There will be an express common

intention where there’s an actual

agreement as to ownership and the fact

the property is going to be shared

between the parties.

 One must look at the words spoken by

one of the parties suggesting the

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 claimant has an equitable interest in the

house.

 This is going to be a matter of evidence

of what the parties said to each other at

the time when the house was purchased,

e.g. legal owner saying “treat this house

as your own”.

〜 The Court of Appeal has decided in the

case of Grant v Edwards there was

an express common intention where

the legal owner had told the claimant

that her name would have been on the

legal title but for the fact it might

prejudice her divorce proceedings

o FACTS: defendant purchased a

house. The house was conveyed

into his name and that off his

brother. The defendant had told

the claimant, who was pregnant

with his child, her name should

not be added to the legal title as

it may affect her divorce. The

defendant paid for the

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 mortgage. The claimant made

substantial contributions to the

housekeeping that enabled

defendant to meet the mortgage

instalments though.

o HELD: the claimant was entitled

to half of the equitable interest

under a constructive trust. There

was an express common

intention based on agreement

that she was to have a share in

the property (besides she had

acted to her detriment by

making substantial contributions

to the household expenses that

she would not have done unless

she believed she had an interest

in the house).

〜 However, in the case of Curran v

Collins, the Court of Appeal observed

that the giving of a specious excuse /

explanation, to avoid embarrassment

over a refusal to make someone a co-

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 owner, will not necessarily constitute

an express common intention the

claimant has an equitable interest.

Here, Ms Curran asked Mr Collins to

put the house he was purchasing into

their joint names but he refused

because it would be too expensive to

buy two life assurance policies. It was

held that his “excuse” did not indicate

a common intention that Ms Curran

had an equitable interest. The court

distinguished this case from that of

Grant v Edwards because in that

case the house was acquired as a

family home and also there was a

positive representation that Mrs

Grant would have been a joint owner

but for her matrimonial dispute.

ii. An INFERRED common intention BASED ON

CONDUCT.

 If there’s no evidence of an express

common intention, the courts look at the

conduct of the parties concerned to

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 determine whether a common intention

may be inferred for the property to be

shared between them.

 The House of Lords in the case of Lloyds

Bank v Rosset said the court will infer a

common intention from DIRECT

CONTRIBUTIONS TO THE PURCHASE

PRICE / DEPOSITES / or THROUGH

PAYMENTS OF MORTGAGE INSTALMENTS,

the court said it was doubtful whether

anything less than financial contribution

to the purchase price would do though.

 Therefore, payment of household

expenses other than mortgage would

generally not lead to the inference of a

common intention to share ownership of

the house, and similarly non-financial

acts, e.g. looking after the family, will not

lead to the inference either, as a general

rule.

 Be that as it may, according to a High

Court judge in the case of Le Foe v Le

Foe and Woolwich, where the

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 payments made are SUBSTANTIAL and

FOLLOWING AN AGREEMENT THAT

THE PARTIES ARE TO SHARE THE

MORTGAGE AND EXPENSES

EQUALLY, WITH ONE PAYING THE

MORTGAGE AND THE OTHER THE

GENERAL HOUSEHOLD EXPENSES, the

payment of household expenses may

only then be regarded as an indirect form

of contribution to the purchase price (but

this was a High Court case only and so

would still most definitely not override

the case of Lloyds Bank v Rosset).

 In summary, on the basis of the case of Le

Foe v Le Foe and Woolwich, the court

may be prepared to infer a common

intention from one’s payment of

expenses if they were SUBSTANTIAL

and REFERABLE TO THE ACUISITION

OF THE HOUSE THROUGH AN

AGREEMENT TO SHARE THE

MORTGAGE AND OTHER OUTGOINGS.

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  The claimant must too have to prove they ACTED TO THEIR

DETRIMENT IN REFLIANCE OF THE COMMON INTENTION.

 In the case of Lloyds Bank v Rosset, Lord Bridge said

establishing detriment meant the claimant had to show they

had SIGNIFICANTLY ALTERED THEIR POSITION IN

RELIANCE UPON THE AGREEMENT.

 In the case of Grant v Edwards, substantial contributions to

household expenses / bring up the children were held to

amount to sufficient detriment.

 Nourse LJ provided the NARROW DEFINITION of “detriment”,

i.e. detriment was said to be “any conduct which the claimant

would not reasonably have been expected to embark if not for

the fact they had an interest in the house”.

 Browne-Wilkinson provided the BROAD DEFINITION of

“detriment”, he said detriment is “any act done by one to

their detriment relating to the joint lives of the parties”.

 One the narrow view, it would be doubtful whether the care of

one’s family would be a significant alteration to their position

since presumably they would have looked after their family

anyway regardless of the existence of an agreement to share

ownership of the property (although meeting some of the

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 household bills may be sufficient if the payments made were

substantial and pursuant to the common intention).

4.2 If a common intention constructive trust is established, what

equitable interest should the claimant receive?

 According to the case of Jones v Kernott, if it’s not possible

to ascertain what SHARES THE PARTIES INTENDED BY
DIRECT EVIDENCE OR BY INFERENCE (i.e. LOOKING AT
THEIR CONDUCT), then each party would be entitled to the
share which the court considered to be FAIR HAVING
REGARD TO THE WHOLE COURSE OF DEALING.

 EXAM TIP: there will not have been an express discussion

regarding shares in the exam, one must check to see whether
though an intention can be inferred, if not simply move on 
the party would be entitled to the share the court considered
to be fair having regard to the whole course of dealing.

 According to the case of Stack v Dowden, in considering

what would be fair having regard to the whole course of
dealings the courts will consider:

 Advice and discussions at the time of the purchase;

 The purpose for which the house was acquired and the
nature of the relationship;

 Whether resources were pooled;

 Contributions to mortgage payments;

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  Payments of outgoings such as council tax and utilities,
repairs and insurance and payment for improvements.

5. DOCTRINE OF PROPRIETARY ESTOPPEL

 The doctrine of proprietary estoppel is another method by

which a person may become entitled to an equitable interest

in property in the absence of appropriate formalities.

5.1 Establishing the Equity

 Proprietary estoppel gives rise to equity where “(a) THE

LEGAL OWNER HAS BEHAVED IN SUCH A WAY THAT THE

CLAIMANT BELIEVES HE HAS, OR WILL GET, SOME

RIGHTS IN RELATION TO THE PROPERTY, and (b) THE

CLAIMANT MUST HAVE ACTED TO HIS DETRIMENT IN

CONSEQUENCE OF THIS BELIEF”

 Regarding the assurance given as to the rights of the property

 the behaviour may take the form of an ACTIVE or a PASSIVE

ASSURANCE.

 Examples of active assurance:

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 》 Pascoe v Turner

o FACTS: the legal owner of a house had repeatedly

told his unmarried partner the house was hers.

o HELD: the legal owner was estopped from denying

her an interest in the house after she had effected

improvements, repairs and decoration in reliance

on his assurances. The legal owner had stood by

and allowed her doing the work and spending a

few hundred pounds.

》 Inwards v Baker

o FACTS: a father persuaded his son to build a

bungalow on the father’s land.

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 o HELD: it was then unconscionable for the father to

claim that as the bungalow was on his land, it

belonged to him.

 A PASSIVE ASSURANCE occurs where the LEGAL OWNER STANDS

BACK AND LETS THE CLAIMANT ACT TO HIS DETRIMENT IN THE

BELIEF THAT HE IS ENTITLED TO AN INTEREST IN THE PROPERTY.

 The assurance might relate to future rights in a property.

》 Gillett v Holt

o FACTS: G worked on H’s farm; H persuaded G to

abandon plans for college and to work for him

instead; H stated that on his death the farm would be

left to G; however, the relationship soured and H

executed a will where G did not receive the farm; G

later was dismissed and claimed a proprietary

estoppel.

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 o HELD: in view of the promises made, reliance was

presumed; G had been denied the opportunity of

bettering himself by not going to school.

 THE CLAIMANT MUST ALSO ACT TO HIS DETRIMENT IN RELIANCE ON

THE ASSURANCE  there must be a causal connection between the

assurance and the detriment.

 The promises relied on must at least be a reason for the claimant

acting to his detriment.

 The onus is on the claimant to show the causal connection as a

matter of fact.

 What amounts to detriment?

 Financial and personal detriment (Gillett v Holt);

 Improving the legal owner’s land (Inwards v Baker);

 Looking after an elderly person in exchange for a promise that

that person would leave the house to the carer (this must be

well beyond “what was called for by natural love and

affection” (Re Basham);

 Assisting and supporting the legal owner in pursuit of career

(Southwell v Blackburn).

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  Note: detriment does not have to be financial so long as it’s

something substantial (Gillett v Holt).

 Note: once reliance had been proved, the burden would be on the

other party to show the individual had not acted to their detriment

(Greasley v Cooke).

5.3 Satisfying the equity

 The remedy should be the MINIMUM TO SATISFY THE EQUITY

according to the case of Jennings v Rice, though in the subsequent

case of Joyce v Epsom the court said the OVERALL FOCUS HAS

TO BE ON WHAT IS FAIR AND PROPORTIONATE AS BETWEEN

THE PARTIES.

 Where the claimant and defendant have reached a mutual bargain,

and so regard the expectation as roughly equivalent to the

detriment, the court may fulfil the expectation.

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  Where this is not the case though, the court would consider other

factors such as:

 Unconscionability;

 Alteration of the defendant’s finances;

 Financial obligations;

 The effect of taxation;

 The defendant’s benefit;

 The claimant’s benefit;

 Proportionality.

5.4 Proprietary Estoppel and Constructive Trusts

 The facts of a case may entail that one would be entitled to an

interest by proprietary estoppel or alternatively create an

interest under a common intention constructive trust.

 Constructive trusts are based on common intention, whereas

proprietary estoppel stems from reliance on an assurance given

by the owner.

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  The detriment required for constructive trusts and proprietary

estoppel are different.

 For proprietary estoppel there is a greater willingness to accept

non-financial acts such as caring for an elderly or giving up a

secure tenancy (provided they were done in reliance on the

assurance and not acts which the claimant would have done

anyway).

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